'Of course we're not doomed. We're never doomed in America.'

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Thu Mar-27-08 12:01 AM
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'Of course we're not doomed. We're never doomed in America.'

Transcript: Clinton on Economy

Sen. Hillary Rodham Clinton, D-N.Y., campaigns at the Daughters of the American Revolution (DAR) Constitution Hall in Washington, Wednesday

Mortgage Crisis and Trade
March 27, 2008

Wall Street Journal: I wanted to start it off talking to you, thinking back to your husband's administration, to the first Clinton administration, when he made the famous remark that the era of big government is over . . .

Sen. Clinton: I think it's fair to say that the meaning behind his statement went to the welfare state as it was then understood. He was a very vigorous proponent of smart, practical government solutions. After all we did tackle health-care reform and welfare reform and certainly in as complex an economy and society as we now have both here at home and globally, government has to play a role and we need to make sure we define the role in the right way. We've got to get the balance right…so that if we make sure we have a free market that is producing wealth and jobs and opportunity and a civic sector that takes care of so much of what makes life worth living from family relationships to religion to charitable activities and then a government which has to be transparent and accountable and competent and a partner in helping to create the circumstances for a positive future and I think that's where we want to be and when America is at the best, we are.

WSJ: What is the role of government in restoring confidence?

Sen. Clinton: I think it starts with the president conveying both competence and confidence in the economy and in the fundamentals of our society. I think it includes the government fulfilling its own responsibilities when it comes to budgeting and fiscal decision-making and I think it certainly requires that the interactions that citizens have with their government, whether it's on a day-to-day basis or it's something extraordinary like the aftermath of Katrina, give Americans reason to believe that their government is functioning effectively. Confidence is made up of a lot of experience and perception and right now I think we have to rebuild confidence not only in our economy and in our economic decision makers but also in our political system and in our government, and that will be one of my goals as president.

Sen. Hillary Clinton listens as she is introduced by her daughter Chelsea as they campaign at the Daughters of the American Revolution (DAR) Constitution Hall in Washington, Wednesday, March 26, 2008.

WSJ: What do you think is the affect on confidence of the U.S. threatening to withdraw from NAFTA?

Sen. Clinton: I think we have to take a hard look at all of our trade agreements and that includes NAFTA. I believe it is a missed opportunity for the United States not to view trade in a broader context and that is what kind of global economy do we want to help create and prosper and it is one where we do want labor and environmental standards to be part of the global trading system. Their absence works not only to our disadvantage but also to the creation of broader based prosperity in a lot of the countries with whom we have trading agreements. So from my perspective, we've had 14 years of experience with NAFTA and in some parts of our country and in some sectors of the economy it is working very well. But in others we really haven't come to grips with the comparative disadvantages we have suffered because of our trading agreements. I was struck by some writing that Paul Samuelson has done over the past couple of years basically arguing that comparative advantage in the 21st century may not be what it was in the 20th or the 19th or the 18th century and I think there's a lot to that…It's part of a broader concern of mine. How do we come up with a global framework for the economy that is the equivalent of what we did after World War II…when the IMF and all these mechanisms were put into place but which is clearly not adequate for conditions today, and therefore trade has to be looked at with a fresh eye, I think.

WSJ: . . . if the global economy has outpaced our ability to regulate it, then we're doomed, so what do we do?

Sen. Clinton: Of course we're not doomed. We're never doomed in America. We just have to start acting like Americans and recognize our problems and roll up our sleeves and put our heads together and solve them. And the third lesson I was going to mention is the importance of transparency in our financial system at every level. We've had a lack of transparency, that breeds anxiety and undermines confidence. People at the consumer level didn't understand the risks they were facing with these new mortgage products and at the most sophisticated level the lack of transparency in these complex new pools of securities confounded long time Wall Street experts. So we have an opportunity here. Yes, we have a crisis and we have to meet that crisis but we have an opportunity to recognize how interconnected our economy has become, not just globally but between Wall Street and Main Street and how the actions of an executive at Bear Stearns or at Countrywide can impact homeowners and small bus and whole industries and we need common sense rules that will give us a regulatory structure that will meet the challenges we face today . . .

Transcript (plus audio): http://online.wsj.com/article/SB120657183516166831.html?mod=googlenews_wsj